imOllSON ·. orrIZENS' NAT. BANK OF FA.RGO.
NAT. BANK OF FARGO v. 1'it;OMSON. (QreultOourt of 4PD.eals, Eighth Clreuit. Novemper 14, 1892.)
, Nos. 156, 161.
lettem patent to Walter Tbomso.nfor an improvement inthG"manutaeture bQoks, whereby the short leaves are :p,el1orated 11k, toldqlg in such a manneras to transfer the col'PUll page to thesuceeedlng left-hand page. are vll1i.d, 'as even sktn'edbobkkeepers 1l,ad discovered it, although ilie ll'eVlee Is soEllJjtpleand ob\'l.6\lS, as well¥ useful. that It would .eem'iliat fttsbuuldha'",o always known and .use9. Hollisterv. Manufac:w.rlpsjP9.· 1$ sup. Qt. R.ep. 717, 113 :l:J. S. 59, 72, 2. "'" ',' 4.: I(ew, ,iilid useful Imp,f.Vvement fu the ,manufa(ltnre of, bank aecount terms of the patent laws. b()oRl' 8. SAMil.L;LIo:b:N'81ll,:",NoNTILU811'ERABLB. ' , ; !A. ooputnersblp conductlng a bank Was permitted to use an Improvement in · l;\cCPmtlt books for seven months before application for a patent wastlled' whiCh was, ,done December 31, 1886. The firm was dissolved JanuarY 1,1887, and IlUcceededbya corporation which used the old account bOOk, perhaps other SimUar books, with the patentee's consent, durin, 1887; In 1888, 1889, BJid 1890 it paid a royalty for ,all suchpooks used, .tl\o'Ugb: J,)u.rC,hiuled in' Pll,t;: fromunllcenaed makers. Thereafter It used but paid no royalty. Held, that the implled llcense to the copartllerShlpunder Rev; St. § 4899, wall incapable of assignment or transfer. 8ll;d that the corporation infnnged.
AppeaJsfrom the Circuit Court ,of the United States for the District ' In Equity. BUl by Walter Thomson against the Citizens' National Bank of Fa.rgo, N. D., for infrinb"emen,t of letters patent. The circuit court held the patent valid, but dj,smissed the bill. Complainant appeabJ,his caU$e :being numbered 15G. Defendant also appeals, his cause beingnumbel'ed 167. Reversed, and decree directed for complainant. Statement/by SANBORN, Circuit Judge:
These are cross appeals from a decree dismissing a bm in equlty brought in patent No. 385,048, dated July 3, 1888, and l'elssued dateclpecember 25,1888, for an Improvement in the mlUlufacture of bRnk accOlmt books, against the Citizens' National Bank of Fargo for inftmgement. The patentl:'.d Improvement consisted in constructing ,each of tb.eshort leaves of ballk account books, by so ruling and perforating,ol',creaslng them. that the margins thereof could be conveniently folded back.. upon themselTell, and made thus to disclose a column for the entry of balances ,of account ont11e pages preceding those to w4ich columns belonged, so that when the leaves were unfolded the columIll:l thus disclosed would appear on the pages s\lcceeding those upon which, they appeared when the leaves wale folded." iii' " The state of the art prior to this invention was such that bank account books had long been manUfactured with long and short leaves. On the margin of each left-band page of the open account book, were usually writ· long leaf, on ten the names of those ha\'l.ng accounts with the bank. The remainder of thl8 page and the right-hand page were generally divided by perpendicular lines into sIx spaces, to accommodate the business of the six days of a week, and each of these apacea was again divided by Uke linea into three columns, for
THOMSON V.,CITIZENS' NAT; BANiK.
the entry, opposite their names, of checks, df!posits,llIIdbalances o.f the cusof1;he leaves each long leaf tomers, respectively. One or was so far shortened tLat when turned to' the left its margin would fall upon the line on the long leaf tila.t separated the space where the ARmes> were written from the columns for the accounts. This shorteDirig' ()f ¢ese leaves ated the necessity of rewriting the names upon the short leaves as they were turned, but, when the right-hand page had been filled, it was necessary to rewrite upon the next page the last column, which ,!outained the balances of the accounts, as a basis for their continuance, and to 'acComplish this the bookkeeper must continUlllly turn the leaf as he proceeded, or must COpy otr the entire column upon It, separate piece of paper, and then recopy it upon the sucTo oj)viate the necessity of thus rewriting this column Jf· balceeding ances, an:! to transter it without copying from the margin of the right-hand page, was the obpage of the book to the margin of the succeeding ject of complainant's invention, This he accompllshed by so ruling and then creasing. or perforating each of the short leaves in a line parallel to its mar· gin, and at such a distance therefrom, that by folding it upon itself it disclosed upon the right-hand page of the open book and in the proper location of the last column of balances thereon, the first column on' the succeeding left-hand page, which wa!'1 ruled for· the column of balances. When any leaf was thllil folded back. and this column filled, the simple turning and unfolding of the leaf transferred this column of balances to the succeeding page. Alter describing in his specificlltions the usual construction of bank accOlwt books, his improvement in their manUfacture, and its advantage, with proper references to figures atwched illustrating it, the patentee c1l1imed: "(i) '.rhe, bank account book, A, having a suitable number of full leaves, 0, and alternate series of short leaves, B, each of said short leaves having margin. b. creased or perforated at b'substantially as and for the purposes set forth. "(2) The bank aooount book heretn' described, composed of alternate long and series of short leaves, the several long leaves prepared to receive the depositors' names on the left-hand side. and both also prepared to receh-e tbe accounts for several successive days, the right-hand end of each of said short leaves having a margin adapted by folding to receive the last day's balance, so that when the leaf is turned, and said margin straightened out, said balance forms the beginning of the next day's account on the next page." Tbe application for the original letters patent was filed December 31,1886. The was organized as a national bank January 1, 1887. It sue· ceeded to the business. books, llnd bookkeeper of the Bank of Fargo,. which was a copartnership. Oomplainant ordered the first book containing biB improvempnt in April, and received It in May, 1886, and the bookkeeper of the Bani. of Fargo, who got his first idea of this improvement from complainant, commenced June 2, 1886, to transfer his balances on the account book he was using, without rewriting, by folding the short leaves of his account book to the right, and continued to use this bo·)k in that way, witb the knowledge of, and without objection from, complain:rot, during tbat year and the next, until the book was filled. complainant arranged with certain manufacturers to make ltnd sell bank account boolts cont'lining his invention in 1887, and the defendant bought its account books for 1888 and 1889 of these manu· facturer!'1. Defendant ordered from unlicensed manufacturers in 1889, and used in 1890, account boolis containing this in,ention, and paid the complainant a royalty thereon. Defendant ordel:oo from unlicensed manufacturers in 1890, and used in 1891, account books containing this invention, and for this infringement this suit was brought. The circuit court held the patent valid, and this holding the defendant ase.igned as error. That court held that, "witbin two yl'ars prior to the application for the. patent 1Jy Walter Thomson, the Bank of Fargo, the predecessor of the defendant, made and used 'a bank account book with the knowledge and consent of the said patentee, embodying substantially the same devices embraced in and protected by said reissued letters patent No. 10,997, and the defendant, as successor of the said Bank of Fargo, has a right to make and use, and to continue to make and use, tbe thing invented, the right to which is secnred in said patent, without liability therefor," and on that ground the bill. and this holding is assigned as error by the complainant.
FEDERAL REPORTER,vOl. 58.
setllNeWmaIl,for Citizens' Nat. Bank. and SANBORN, Circuit Judges, and SID· BAS, D:iStci:ct Judge.
SANlJOR,:N" Circuit Judge, (after stating the facts.) Letters pat. ent grant a public franchise, giving to the inventor some compensa· e1ercise of his 'inventive genius in the discovery of, and tion his lab<)raIi(I ingenuity in reducing to practice and describing, novel and useful inventions, by which the public may attain beneficial l'esultswith of time and labor. From every patented invention of value the compensation derived by the inventor is small inpr0J;>9rtion to the ben¢t conferred upon the public. The invent· or's reWard is limited to a. ,few years, at most, while the benefit to the public continues forever. No patented invention can, in the nature of things, ,be valuable to its owner unless it is of greater value to the puMic' 'even during the term of his franchise, since the latter will not purchase the right to vend or use it unless it is more profitable to do so than to do without it. Letters patent issued under our constitution' and laws thus offer the necessary pecuniary inducement to tho!ile'gift with invellth-e genius, without which they would not d be able to bestow the thought, tilllE\and' toil required to find, perfect by experimellt, reduce to practice, and give to the public many of thoseusefuliin:v'entions which have ertabled us to excel in the manufacture anq,u1:lW of' aud in in the useful tbat promote ,the effiCIency and comfort of our Cltizens. The time, thonght, labor;: and expens('l that produce a valuable invention are the inventor's, the completed invention which' is their Joduct is 1lf$,and lbconsiderationofhis describing it, and making it 'to ',tp,e p\l'blic isgraJl.too the exclusive right to use and vend it for a Jimited time, this franchise should not be regarded as a monopoly conferred on him at the expense and to the prejudice of the puplic"bUtas a just and faireonsideration, granted for val:whi,ch both equitably and legally entitle him to the same protection for this property that the owner of any other species ofpl'operty enjoys. The defel;idant, after recognizing and paying for the use of complainant's invention for three years,infringed it in 1891, and seeks to justify its course on the ground that the patent is void for want of novelty, and that its predecessor in 1886 used the invention withO1ltobjectionfrom the complainant. The letters patent were prima facie evidence of the novelty of invention, and.no evidence was produced that it had ever been known, described, or practiced before complainant discovered it. A glance at the patent and the invention itself, arid the fact that defendant used and paid a royalty for the of it for three and now infringes, sufficiently establish its utility. The mere fact that the patented invention is but a combination of old ingredients dr'materials is not a tenable objection to the patent, since it is a general rule that a patentable invention may con-
,:Q.J!j.:;Ia,slin, for Walter ,Thomson.
CITIZENS' NAT. BANK.
sist entirely in a new combination or arrangement of old or well· known ingredients or elements, provided a new and useful result is thereby attained. Seymour v. Osborne, 11 Wall. 516, 542, 548; Rees v. Gould, 15 Wall. 187, 189. That after the discovery and practice of the invention it seems so simple and obvious that the wonder is that it had not been always known and used is not always conclusive evidence that it has not sufficient novelty to be patentable, especially where the desirability of the useful result attained must have been long obvious to all persons skilled in the art or manufacture to which it pertains, but no one discovered or practiced it before the patentee. In The Barbed Wire Patent, 143 U. S. 275, 281, 283, 12 Sup. Ct. Rep. 443, the Glidden patent for the coiled barb in combination with the twisted wire, by which the barb is clamped and held firmly in position, was sustained, although strands of wire twisted together had long been used for fencing, and the older patent of Kelly described a wire fence composed of twisted wires and a two-prong diamondshaped barb, with a central perforation, by which it was strung upon one of the wires, and afterwards fastened in place by the blow of a hammer. From this invention of Kelly to the coiled barb and twisted wire of Glidden, clamping the barb rigidly in place, is .1 slight advance, and it now seems obvious that the twisted strands would hold the.barb coiled Upon one of them rigidly in place ; but no one seems to have perceived this fact, and put the twisted wires and coiled barb to this beneficial use, until Glidden conceived the idea, and thus· utiUzed U,and the supreme court :mstained his patent with the remark: .
"It maybe strange that, considering the important results obtained by Kelley in JJ.f.s.. patent, it did not occur to him to SUbstitute a coiled wire in place of the diamond-shaped prong, but it evidently did not; and to the man to whom it did ought not to be denied the quality of inventor."
In Maigowan v. Pacldng Co., 141 U. S. 332, 341, 343, 12 Sup. Ct. Rep. 71, the Gateley patent for "improvements in vulcanized Indi:.l. rubber packing" consisted shnply in combiuing and uniting by vul· canization packing described in the prior patent of McBurney, which consisted of alternate layers of canvas and India rubber, and an elast.ic packing of pure gum, so that the gland of the stuffing box would force the packing with such tightness against the piston rod that a tight joint would result. 'rhe difficulty experienced with the McBurney packing had been that, as it was worn away by the pisten rod, it did not have sufficient elasticity to keep the joint at the piston rod tight at all times. It may seem now that any mechanic skilled irt the art, who observed the difficulty, must, by the exercise of his skill and reasoning powers, have arrived at the now obvious remedy; but no one seems to have done so before Gateley. His discovery was therefore held to be novel and patentable. Defendant's counsel relies chiefly upon the decision in Hollister v. Manufacturing Co., 113 U. S. 59, 72, 5 Sup. Ct. Rep. 717, to sus· tain his contention that the complainant's improvement does not constitute an invention, but is "the suggestion of that common ex· perienoo,' which arose spontaneously, and by a necessity of human
tllo8e<wnohad be(!on1e: dealY in that+ftSe is iuapplicable:to' now us. It rests ,upon. tJ;1e fact that as· as tha le\iI. wllich the" ipfJ.ti'!nfud 'improvement he i was' speaking ·of remedied", became kno'\WI, theresult;atlflained by it became the 'improve· further on' in the opinion, . . '
i reme\;lt:Was stullletttiy those competent to delilwith the subJect, the presentregulatlOn. wb!chHembodled the intprovemetit, 'was promptly suggested and adopted; 8,8" ]skilll'ld mecbAnic. witnessing,the Qfa macbine, inadereasoI;l of som,e defect, the which it has by applicatlonofhis .common aild experience 'reason of the failure, 'and snpplies what 18 "obviously wanted. Itis buttb.e,display of the i expected .sltillof the calling. and involves only the exeJ!clae:9f'itJ).e ordinary faculties ,ofreal:lOning upon the,materj.als supplied bt. facility of manipulation results from and
,., \ " . "','.1
But 'the evil which the complainant's invention remedied had been apparent for years.' The useful result his invention attained must have .been 'sought by. generations Qf' skilled bookkeepers, and their commohbowledge had never suggested this improvement.· It Ibad· been apparent to aU 'men manipuhiting th& account booksof·banks' eV'er mee .such books existed that' it was desirable to make tMlast balanoo column of· on the margin of the right-hand page oftlie'open book the first bolUIIln,Ol);'the succeed· ing page, and thus to obviate the necessity of copying and it whenever two pages were filled, and it became necessar,V' to turn the leaf;.kut skilled with the special knowledge of their calling, "and :tl1e facility of which results from its habitual and intefiigent practice," had gone on, from generation to genera'tloti; eopyingoff this last column, turning the leaf, and then recopying it on the .succeeding page, and no one of them, during all the time since such account books have been in use, by any display of the expected skill of his calling, or bytbe exercise of his faculties of reasoning, had ever arrived at the conclusion that complainant's improvement would accomplish its beneficial result until he discovered and made known his Invention. The probative force of this fact, added to the presumption arising from the letters patent, satisfies us of the novelty and patentability of this invention. If the display of the expected skill of the calling or the. exercise of the ol'dinary faetllties of reasoning had been sufficient to discover and put in practice this impl'ovement,· some bookkeeper would haV'e displayed that skill or exercised those faculties, and thus obtained this result long ago. These were not sufficient. It required something more to attain this result; it required the exercise of "that intuitive ffOOUlty of· th(:\ mind, put forth in the search for. new results or new methods, which creates what ,had not before existed, or brings to light what lies hidden." This faculty the complainant exercised, and tM result is thisiIiV'ention,-an invention, it is true, that nOw seems so simple'thatwEl'marvel that it did not before occur to every
THOMsON V. CITIZENS' NAT. BANK.
bookkeeper, but. one that clearly did not, and that is of such obvious utility that complainant is equitably, as well as legally, entitled to the full protection of his franchise. Loom Co. v. Higgins, 105 U. S. 580, 591; Consolidated Safety Valve Co. v. Crosby Steam Gauge & Valve Co., 113 U. S. 157, 179, 5 Sup. Ct. Rep. 513; Magowan v. Packing Co., supra; The Barbed Wire Patent, supra. The technical claim of the defendant that this invention is not patentable because it is not embraced within the terms of the patent laws is without merit-The .statute provides that· "any person who has invented and discovered any new and useful art, machine, manufacture, or composition of matter,or any new and useful improvem('nt thereof, may- obtain a patent therefor/, when his invention or discovel1Y, is made .under the circumstances proved in this case. Section 4886, Rev. St. 'It is not perceived why one who invents a new and uaefulimprovementin the.mannfacture of bank account books is not equally entitled to a patent with one who invents an improvementin ,the manufacture of barbed wire for fencing, of packing for the· stuffing boxes of pistons, of safety valves for engines, of looms for weadng. cloth,· or of any other article upon improvements in the manufacture of which the supreme court has sustained patents. A. . single question. remains: Do the facts that the copartnership styled the Bank of Fargo was permitted to use the patented inventionfor,seven months before the application for a patent was filed, and that the defendant subsequently succeeded to their business and propertYl confer upon it an implied license to make and use new account books, embodying the patented invention? The application for' this patent was filed December 31, 1886. The Bank of Fargo first applied the invention to their account book June 2, 1886, and used it thereafter with complainant's consent until the firm was dis· solved,January 1, 1887. The defendant corporation was organized and commenced business on that day. It succeeded to the business, account books, and assignable assets of the Bank of Fargo, and this old account book and perhaps others embodying the invention were used by the defendant with complainant?s consent until January 1, 1888. In 1888, 1889, and 1890 it used the invention in its account books, and paid complainant royalty therefor. The defendant claimed, _ and the court below held, that under this state of facts the defendant held an implied license to make and use account books embodying this invention without liability to complainant under sec· tion 4899 of the Revised Statutes, which provides that "every person who purchases of the inventor or discoverer, or with his knowledge and consent constructs,any newly invented or discovered machine, or other patentable articles, prior to the application by the inventor or discoverer for a patent, or wllO sells or uses one so constructed, shall have theright to use, and vend to others be used, the specific thing so made or purchased without liability therefor." This claim was umouJ;ldOO, and the court below erred in sustaining it. The defendant did not purchase, construct, or use any article.. embodying the complainant's imrention before he filed his application for a patent, since it did not come into existence until after that filing. Whatever license it had it derived from the dissolved copartnership
,vol. 5·3. ,had
the specific patentable thing they had made with complainant's sent.' This was not a·grantof any portion of the:franchlse; it title or interest many part of the pateIitiii .copartnership; it did not grant an exclusive right in the whole or 1n'imy ciftcpartof.theterritoryof the United'States; it didinotgive an ex· clusiveright or,privilegeih anything; it was a mero na,ked license, personalrto'the copartnership, and incapable of ':assignmentor fer. The members of the Copartnership could conveYi·a,ndthe sue· ceeding corporation could take, nothing under it by purchase, assign· ment, or succession, unless it might be the right to use the old account book until it was filled, 8jIld that was accomplished early in the year 1887 without objection anyone. Thus, in'Hapgood v. Hewitt, 119 U. &,226··234, 7·Sup.Ot. Rep. 193, where an employe of a Missouri corpora,tion engaged in the manufacture' of sulky plows invented cer· tainimprovements thereoll, which the corporation, -with his consent and .assistance, embodied in the plows it manufactured and sold before he filed any application for a patent thereon, and that corporation was, subsequently succeeded by an .Illinois corpOt'ation,composed Qftheisame stockholders, to which all the business and property of thefomrer corporation were assigned and transferred, it was held that whatever license the former corporation derived from these foots wItS confined to it, and could not be transferred to its Imccessor.. Aga.in,in Locke v. Bodley Co., 35 Fed. 289··294, an employe of a invented, perfected,' .and assisted his employers i.l'1 mantif3ietUling and reducing to practice an improvement in stop valves befoue'M flIed his application for the patent, which he sUbsequently obtained thereon. 0ue of the partners died, and a corporation, in which the 'surviving pnrtners owned all the stock,' except 30 shares reserved for its employe8l' succeeded to the business and propert,y of the: firm,and to it the surviving partners assigned all the firm assets; but in a suit against the corporation for infringement these facts weI''' heldtoeonfer upon it no right to use the patented improvement. T& theM-me effeet are NaU Factoryv. Oornlng, 14 How. 193··216; Oliver v.Ohemical Works, 109 D. S. 75··82, 3 Sup. 61. The result hdhatthe implied license conferred upon any person who purchases of the inventor or or with his knowledge or consent constructs, any newly inveJited or discovered machines or patentable articles prior to his application for a patent therefor, and within two years thereof, to use, or to vend to others to be used, the specific thing so made or purchased without liability therefor by section 4899 of the Revised Stat.utes, is a mere personal license, and' is incapable or assignment or transfer. The defendant, therefore, was not protected by the implied license to the copartnership that preceded it in business, and the decree below is reversed, with costs, with instructions to enter a decree in favor of the complainant for a perpetual injunotion, damages, and costs.
was the statutory priiil:ege of using,' and vendingro others to be used,
.01" assigliment:; but the only"right the·
HUNT BROS. FRUIT PACKING CO. V. CASSIDY.
HUNT BROS. FRUIT PACKING
. .: .· .
(Circuit Court of Appeals, Ninth Circuit. October 24, 1R92.)
PATENTS FOR INvENTIONS -lNFRINGEHEl'iT ApPARATUS.
In an action for of a patent for improvements, in fruit dryers, the patentee. after stating that he had been in pursuits. had seen many different dryers. and had sufficlent,knowledge of mechanics to permit him to give an intelligent opinion as to the cost of a piece of mao chinery when he saw it, was asked which in his judgment would be the ch.eaper to construct. his or th3 alleged infringing dryer.. H.eta. that the ques. tion was not objectionable. on the ground that the witness hali said he did not know the costo! the infringing"dryer.
2. SAME-INVENTION-BuRDEN OF PROOF-DIRECTING VERDICT.
The eXistence of letters patent issued in due form constitutes prima facie evidence of the validity of the patent. and where, in an action at law for in. fringement, such letters are introduced. an alleged want of invention is mat· ter of defense, the burden of showing which is on defendant; and the court cannot direct a judgment for defendant, even though the patentee, on cross· examination, has given evidence that may tend to show a prior state of the art excluding invention on his part. .
SAME-INFRINGEMENT-INSTRUCTIONS-QUESTIONS FOR JURY.
Whether there was invention in the patent. whether plaintiff was the first inventor. and whether the use of gravity catches as mechanical equivalents of spring catches was known at the time of plaintiff'sla'pplication, wereques· tions of fact for the jury . .
In letters patent No. 172,608, issued January 25. 1876, to John W. Cassi4Y, for an improvement in fruit dryers. the patentee first claimed "spring or other catches." but, on an objection that his application was not in proper form. amended by striking out "or other." Held, that this was not a disclaimer of gravity catches, which were known mechanical eqUivalents for spring catches. .
Plaintiff. owning a patent for two improvements in fruit dryers, BuedJor the infringement of but one. Heid, that nominal damages only were recoverable, where the evidence showed only the amount of a license fee for both devices; and the profits to be made in manufacturing fruit dryers containing both improvements. An exceution to the court's refusal to direct a verdict for defendant at tbe · close of piaintiff's evidence is waived by proceeding in the cause, and introducing evidence for the defense. Railway Co.v. Cummings, 1 Sup. Ct. Rep. 498. 106 U. S. 700, and Insurance Co. v. Crandal,7 Sup. Ct. Rep. 685, 120 U.· S. 527, followed.
8.TRi:AL-INSTRUCTIONS-WAIVER OF OBJECTIONS.
. In EITor to the Circuit Court of the United States for the Northern District of California. At Law. Action by John W. Cassidy against Hunt Bros. Fruit Packing Company to recover damages for infringement of patent. Judgment for plaintiff. Defendant brings eITor. Reversed. M. A. Wheaton, I.M. Kallochand F. J. Kierce, for plaintiff in error. John H. Miller, for defendant in error. . Before McKENNA, Circuit Judge, and ROSS and KNOWLES, District Judges.
KNOWLES, District Judge. Defendant in error instituted suit in the circuit court of the United States· for the northern district of v.53F.no.2-17